COMESA 2018 | Page 34

By Stephen Yeboah* A frica sits on vast resources. Of greater potential than its extractive resources, like oil, diamond, gold, or cobalt, is its population bulge. By 2030, it is projected that Africa will have 1.7 billion people whose combined consumer and business spending is expected to reach $6.7 trillion. This demographic dividend – if properly harnessed – offers the continent an incredible oppor- tunity to build a strong labour-intensive manufacturing base. Africa has the fastest-growing youth population in the world; with 60 percent of its population under the age of 24. A robust manufacturing sector could absorb this youth bulge with good jobs while injecting some much-needed diversity into agriculture-reliant African economies. But on the fl ipside of this enormous opportunity, the region is heavily under-represented in global value chains (GVCs). GVC comprise all the people and activities involved in the production of a good or service and its global level supply, distribution and post-sales activities. GVCs are a defi ning element of contemporary globalisation, allowing countries to participate in global trade by specialising in a specifi c part of the supply chain in which they are most competitive. But the question is: why are African countries absent from the GVC game? And what role can COMESA play? Africa faces a host of obstacles in developing the competitive edge needed for entering into GVCs. At the heart of the challenge 34 • COMESA • 2018 is the need for a coordinated, common trade policy and well- established institutions. Trade policies and Africa’s GVC potential Throughout the experiences of Europe, North America and Asia, it is known that building regional value chains (RVCs) is a key step towards participation in GVCs by increasing the market for exports and imports. But intra-African trade is low at just 9 percent, compared to Asia (54 percent) and Latin America (18 percent). In a recent study, the United Nations Conference on Trade and Development (UNCTAD) estimates that on an average, only 6 percent of the value-added exports to African countries are sourced from within the region. There are variations across the different regional blocs. In the Economic Community of Central African States (ECCAS), for example, only 3.6 percent of imports were sourced from within in 2016. In the COMESA, 10.5